Materials Costs of $800,000 and Conversion Costs of $1,020,000 Were

question 24

Multiple Choice

Materials costs of $800,000 and conversion costs of $1,020,000 were charged to a processing department in the month of September.Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process.There were no units in beginning work in process, 20,000 units were started into production in September, and there were 5,000 units in ending work in process that were 40% complete at the end of September.
-What was the total amount of manufacturing costs assigned to the 5,000 units in the ending work in process?

• A)$455,000.
• B)$500,000.
• C)$320,000.
• D)$200,000.

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Definitions:

Line-by-Line Method

The line-by-line method is an accounting technique used in consolidating the financial statements of a parent company and its subsidiaries, where each line item of the subsidiary’s financial statements is added to the parent’s corresponding items.

AASB 11

Australian Accounting Standards Board pronouncement governing the accounting for arrangements between parties that are collectively controlling an economic activity.

Jointly Controlled Entities

Businesses owned and operated by two or more parties who share control and decisions, typically structured through contractual arrangements.

Contractual Agreement

This is a legally binding agreement between two or more parties with mutual obligations, often delineated in a document.